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Shaun Poh: Will Singapore’s office demand remain strong in 2022?

Shaun Poh • 14/02/2022

Office investment in Singapore grew 2.4 times y-o-y in 2021, despite the challenges of the pandemic. Will this strong demand continue in 2022?


With projected strong growth in Singapore’s CBD office rent in 2022, more office buildings are expected to change hands this year. Investors looking to deploy capital into safe haven assets with healthy returns continue to find the Singapore office market appealing.


We think office assets along Cecil Street, Robinson Road, Tanjong Pagar area and those locations eligible for URA’s CBD Incentive Scheme, will continue to attract strong interest from value-add and core plus funds as well as family offices, in view of possible conversion and potential enhancement in gross floor area under the scheme. More residential developers will also join in the race to acquire such office assets in the CBD for residential conversion to take advantage of the bonus plot ratio under the scheme, at the same time avoiding paying hefty Additional Buyers Stamp Duty (ABSD).


With structural changes in the global economy, we should see more value-add funds acquiring old and inefficient office buildings, upgrading them to ESG compliant standard and sell them to institutional investors or family offices looking for future-proofed buildings.

Whilst the outlook looks positive, there are always downside risks, the biggest of which is new COVID-19 variant emerging that hamper the global re-opening, and of course as could faster than expected interest rate increases. In addition, a slowdown in China could impact office demand in Singapore. With the huge amount of capital chasing limited assets in Singapore, yields are likely to compress further and price out smaller players.

Notwithstanding the potential downside risks, investors who are still standing on the sidelines should fast track their planning to seize the opportunities currently available in the market.

These opinions are the author’s own and do not necessarily reflect the views of Cushman & Wakefield. To find out more about how Shaun Poh views opportunities in Singapore, click his profile and get in touch.

For more on investment opportunities across Asia Pacific, visit our Real Estate Investment Hub here.

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